Question

Vermont Resources has the following account balances at March 31, 2012. The inventory balance was determined using FIFO.

Vermont Resources has determined that the replacement cost (current market value) of the March 31, 2012, ending inventory is $20,200.

Requirements1. What value would Vermont Resources report on the balance sheet at March 31, 2012, for inventory assuming the company uses the lower-of-cost–or-market rule?2. Prepare any adjusting journal entry required from the informationgiven.